Economic Profit Enhancement of a Demand Response Aggregator Through Investment of Large-scale Energy Storage Systems

To provide flexibility for the operation of smart electricity networks, a large number of scattered demand response resources are managed by a demand response aggregator (DRA). Increasing the economic viability of this new entity, i.e., DRA, has attracted a great deal of attention in recent years. Following this direction, this paper proposes stochastic model of multiple large-scale energy storage system (LESS) investments from the perspective of a DRA. A LESS directly connects to smart distribution networks and provides the possibility to save energy costs and thereafter increase the energy efficiency of the DRA. In this paper, a novel mixed-integer model is proposed to determine the optimal capacity and operation of a LESS in coordination with a DR scheme. The model, as a main contribution to literature, comprises novel managerial options, such as the number of allowed DR actions, the number of allowed charging and discharging. Moreover, the model is designed to be capable enough to exclude the hours in which the demand side is not allowed to participate in DR. The proposed model is tested through a numerical example with various case studies. The simulation results show the substantial economic impacts of considering the introduced managerial options in the coordination of a LESS operation with DR.